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The original site was designed by Mikko Hyppönen and deployed by Henrik Rydberg. It was later upgraded extensively by Dan Balis. The current layout was designed by S. Abbas Raza, building upon the earlier look, and coded by Dumky de Wilde.

Wednesday, September 29, 2004

The globalization debate heats up again

With the exception of the war, few issues incite more passions these days than “globalization”. (It's “Jihad vs. McWorld”, in another sense.) The debate in some ways has been going on since decolonization, but its shows no trend towards being resolved anytime soon. Both sides of the debate, moreover, see the fate of the world’s poor caught up in the fight, and each insists that its way will improve the poor’s lot most.

The sides are not so easily divided into left and right, as recent debates suggest. David Held’s piece in OpenDemocracy (subscription required) has provoked a number of responses from across the spectrum. To take one (free) example, Patrick Bond retorts from the “anti” camp:

“‘Without suitable reform’, he [Held] writes, ‘our global institutions will forever be burdened by the mantle of partiality and illegitimacy.’ But these are not ‘our’ institutions – they are the tools of global capital and the petro–militarists in the White House and Pentagon. In any case, suitable reforms have proven impossible, given the terribly adverse global–scale balance of forces prevailing in recent years, and for the foreseeable future. Hence, virtually all feasible global–scale reforms actually legitimise, strengthen and extend the system of accumulation by dispossession.”

“[I]f you take countries during a forty-year postwar period, the economic ‘miracles’ with more 3% growth rate in per capita income also had similar growth rates in their trade. The economic ‘debacles’, with growth rates of zero or negative per capita income also had abysmal growth of trade.

Of course, we economists know that this does not tell us what caused what:. But when you undertake analysis of specific countries in depth, e.g. India, China and the Far East, it is foolish to claim that growth took place exogenously to trade policy and trade expanded as a consequence. [Rodrik has tried to argue otherwise for India but without success.] That other factors contribute to growth or decline is, of course, true but opening to trade was critical in enhanced outcomes and without it, the growth could not have been sustained.”

I was reminded of this debate because of the fierce discussion on Brad DeLong’s site. DeLong has an intense, lengthy post on an article on coir mat makers in India by Seth Stevenson in Slate. (DeLong, it should be noted, is hardly a simple, knee-jerk and uncritical proponents of economic globalization as this piece on capital mobility shows. Neither is Bhagwati for that matter.) DeLong is merciless in his indictment.

“By this way of thinking, Seth Stevenson is a thief. No, he is worse than your common-variety thief: a common-thief steals from the rich, while Stevenson steals their livelihood from the poor. Stevenson is a thief who steals the poor's livelihod. No, he is even worse--for he incites others to steal the poor's livelihood as well. And he is even worse than that: a thief--even the master of a gang of thieves--makes use of what he steals, while Stevenson simply destroys the looms . . .”

What's odd is that for a debate about an issue presumably with a "fact of the matter" (does trade make people richer or poorer? more or less equal? does it dissolve indigenous cultures in the poorer parts of the world?), it has taken the tone of a moral (maybe even religous) dispute, with all sides invoking the interests of the poor of the world.